The Vice
President of India Shri M. Hamid Ansari has said that new
technologies are blurring the political, geographical and socio-cultural
boundaries that have kept the world divided over millennia. Today we are increasingly
interlinked, have enhanced competition, and are beneficiaries of the globalized
market place. Addressing on ‘Global Regionalism and Regional Inertia in
South Asia' at the inauguration of the International Relations
Conference on ‘India and Development Partnerships in Asia and Africa: Towards a
New Paradigm” at Symbiosis International University [SIU], Pune,
Maharashtra today, he has said that the traditional North-South divide is being
altered by the growth and development in the emerging economies of the South.
The continuing economic and financial problems of the industrialized countries
have led to a narrowing of the economic gap between developed and developing
countries. As a result, the balance of economic power is slowly but surely
shifting from Europe and North America to Asia and Latin America. Africa’s
growth performance has also improved hugely since the start of the 21st
century.
He opined that we
still have a long way to go before the targets set in the global development
agenda are attained by the developing world. We also need to develop an
international consensus on the post-2015 development agenda and its
realization. The decline in the Official Development Assistance of the
developed countries has propelled the developing world to seek new and
innovative sources of funds for their development agenda.
The Vice
President said that in this regard, the emergence of regional economic
integration in different regions of the world, with integrated markets for
goods, services, investments and technology, is proving to be an effective
vehicle for seeking prosperity. Regional cooperation, of course, had an earlier
beginning and preceded globalization. Western Europe in the post-World War II
period witnessed the formation of the European Coal and Steel Community and the
EURATOM leading to the European Economic Community and eventually to the
European Union. The EU has lived up to the expectations of its founding
fathers and has transformed itself from being a purely economic grouping to a
union of sovereign states enjoying an unprecedented degree of political and
economic integration.
He said that most
regions of the world are endowed with their own physical, economic and
political geography which poses challenges to economic development. In some,
political borders are not aligned with economic and natural resources. National
economies and populations, on the other hand, are generally small and have poor
connective infrastructure. Regional integration and cooperation offers the
means to overcome these obstacles and to be competitive in the global
marketplace. Empirical evidence suggests that it also leads to dispute
settlement mechanisms, to greater people-to-people contacts and to better
political relations between the involved countries. Examples of this are to be
seen in ASEAN, the African Union, GCC and some of the Latin American regional
groupings.
The Vice
President said that India’s experience of bilateral development partnerships in
South Asia, with countries as diverse as Afghanistan, Bhutan, Myanmar and Nepal
is sufficiently indicative of our capacity to undertake regional cooperation.
In any such endeavour, the immediate or shorter term commercial, foreign policy
and strategic interests must be balanced with our longer term objective of
becoming a regional and global actor of relevance and significance in a fast
changing world. It follows that an attitude of neglect or immobility to our
immediate neighbourhood will not enhance our capacity and may deny us options.
Global observers have also noted our policy approach of developing cooperation
with other regional organisations in and around Asia and have contrasted it
with our studied neglect of SAARC.
Following is the text of the Vice President’s address :
“I am happy to
be here today for the inauguration of the International Relations Conference on
‘India and Development Partnerships in Asia and Africa: Towards a New
Paradigm’ organized by the Symbiosis International University, with the
support of the Ministry of External Affairs, Government of India. The theme of
the Conference is relevant to the emerging world scenario in which the older
paradigm of international economic relations and cooperation is increasingly
becoming obsolete.
The panel of
distinguished speakers will shed much light on a new approach that has been
developed by us in India in regard to development partnerships with specific
reference to Asia and Africa. Its results are noteworthy.
I, on my part,
would like to deviate a little from the principal theme to think aloud about
regional cooperation in our own region of Asia, that is, South Asia itself. My
reason for doing so is to address the apparent paradox of prospering
regionalism in most parts of the world and its miniscule presence in our
immediate neighbourhood.
This audience
knows well that our world has been transformed into an integrated and
interdependent global village. New technologies are blurring the political,
geographical and socio-cultural boundaries that have kept the world divided
over millennia. Today we are increasingly interlinked, have enhanced
competition, and are beneficiaries of the globalized market place.
The traditional
North-South divide is being altered by the growth and development in the
emerging economies of the South. The continuing economic and financial problems
of the industrialized countries have led to a narrowing of the economic gap
between developed and developing countries. As a result, the balance of
economic power is slowly but surely shifting from Europe and North America to
Asia and Latin America. Africa’s growth performance has also improved hugely
since the start of the 21st century.
We still have a
long way to go before the targets set in the global development agenda are
attained by the developing world. We also need to develop an international
consensus on the post-2015 development agenda and its realization.
The decline in
the Official Development Assistance of the developed countries has propelled
the developing world to seek new and innovative sources of funds for their
development agenda.
In this regard,
the emergence of regional economic integration in different regions of the
world, with integrated markets for goods, services, investments and technology,
is proving to be an effective vehicle for seeking prosperity.
Regional
cooperation, of course, had an earlier beginning and preceded globalization.
Western Europe in the post-World War II period witnessed the formation of the
European Coal and Steel Community and the EURATOM leading to the European Economic
Community and eventually to the European Union. The EU has lived up to the
expectations of its founding fathers and has transformed itself from being a
purely economic grouping to a union of sovereign states enjoying an
unprecedented degree of political and economic integration.
This example has
been emulated, in varying degrees, in other regions of the world. In Asia, the
ASEAN and GCC are at different stages of economic integration, while groups
like IOR-ARC, BIMSTEC and our own SAARC are trying to move forward. In Africa,
the African Union and the regional communities, such as SADC, COMESA, EAC and
ECOWAS, are doing concrete work. In Latin America, the Andean Community, MERCOSUR,
CARICOM and CELAC etc. have taken shape and are taking notable steps towards
integration. North America has the NAFTA and aspires to be a part of a future
FTAA. Similarly, APEC and ASEM are inter-continental groups that have been
established to promote economic partnerships across continents.
Other impulses
are propelling new economic groupings such as the Trans-Atlantic Trade and
Investment Partnership (TTIP) between US and EU and Trans-Pacific
Partnership(TTP), a trade agreement between countries of Asia and the Pacific
region, are being promoted to boost trade and economic growth.
What explains
this trend toward regional economic integration? It is, in a word, competition
driven and a direct product of globalisation. Economists explain its benefits
in terms of economies of scale, increased local supply capacity, improved
access to markets, enhanced foreign investment, integrated or harmonised
treatment of trans-border trade issues and better management of shared natural
resources.
Most regions of
the world are endowed with their own physical, economic and political geography
which poses challenges to economic development. In some, political borders are
not aligned with economic and natural resources. National economies and
populations, on the other hand, are generally small and have poor connective
infrastructure.
Regional
integration and cooperation offers the means to overcome these obstacles and to
be competitive in the global marketplace. Empirical evidence suggests that it
also leads to dispute settlement mechanisms, to greater people-to-people
contacts and to better political relations between the involved countries.
Examples of this are to be seen in ASEAN, the African Union, GCC and some of
the Latin American regional groupings.
The one
exception to this trend is South Asia. It brings forth three questions:
·
Why has regionalism failed to take off in South Asia?
·
What is the opportunity cost of this failure?
·
What is the corrective?
Home to almost
one-fifth of humanity and two-fifths of world’s poor, South Asia counts for only
around three percent of World GDP and has only around 1.7% share in global
trade. It is confronted with major developmental challenges of poverty,
inequality, illiteracy, disease, hunger and homelessness. The region is endowed
with a rich but fragile ecosystem, which is vulnerable to the high population
density and major natural disasters such as floods, draughts, cyclones
earthquakes etc.
A joint and
cooperative effort in addressing these common challenges should be the logical
way forward for South Asia. Common geography, economic and ecological
complementarities, historical and cultural affinities provides sufficient
incentives for intensive regional cooperation.
India’s large
and growing economy offers to states of the region a profitable destination for
their exports and a competitive source for their imports, investments and
technology. A recent IMF study found that the spill over effects of India’s
increased growth to other SAARC countries were positive.
An even greater
incentive for enhanced regional cooperation is management of natural resources
such as water which in turn can help in address issues of energy and water deficit
and tackle natural calamities such as floods and draughts. A cooperative
framework for these would prevent potential political disputes arising out of
these.
Given the
cultural, social and religious affinities, enhanced intra-region travel and
tourism will not only promote people-to-people contacts but contribute
substantially to the regional economy through revenue and employment
generation.
Despite these potential benefits,
however, South Asian economies remain the least integrated. Intra-regional
trade, for instance, has stagnated at around 5.76 per cent of its total trade,
compared to roughly 61.83 per cent in the EU; 48.54 per cent in the NAFTA
area, 25.96 per cent in the ASEAN and 14.90 per cent in MERCOSUR. Even
Sub-Saharan Africa, with poor transport and telecommunication infrastructure,
scores over South Asia, with over 10 per cent of its trade being
intra-regional. [Data Source: UNCTADstat 2012]
Foreign direct
investment (FDI) amongst SAARC member states is minimal, due to regulatory
issues and a non-facilitative business environment. Intra-region travel and
tourism is also below desired levels.
The South Asian
Association for Regional Cooperation was set up in 1985. Progress towards its
stated objectives has been tardy. A telling comment on its work was made by
Prime Minister Manmohan Singh at the 16th SAARC Summit in April
2010:
‘We have
created institutions for regional cooperation, but we have not yet empowered
them adequately to enable them to be more pro-active…The challenge before us is
to translate institutions into activities, conventions into programmes,
official statements into popular sentiments. Declarations at summits and official
level meetings do not amount to regional cooperation or integration. Regional
cooperation should enable freer movement of people, of goods, services and
ideas. It should help us re-discover our shared heritage and build our common
future. The 21st century cannot be an Asian century unless South
Asia marches together.’
Analysts have
attributed reasons for immobility and low levels of intra-regional trade. These
are:
·
Disparity in size between India and its neighbours with India
accounting for four-fifth of the regional GDP by value
·
Weak port and transport infrastructure
·
Difficult business environment
·
Apprehension of being swamped by Indian business interests and
resultant damage to local industries
·
Persistence of high levels of overall protection
·
Restrictive rules of origin and destination
·
Lack of coverage and commitment in the merchandise trade
agreement, and
·
Persistence of ‘negative list’ category as an impediment to Free
Trade.
Despite these
the question, in the final analysis, boils down to political will, or a lack of
it, to further regional cooperation. Some scholars, familiar with the subject,
have opined that ‘India has remained a reluctant and hesitant participant in
SAARC from the beginning’ principally on account of the obduracy of one or two
members of the grouping. Notwithstanding the merit of this argument, the fact
remains that most issues in South Asia – terrorism, maritime security, health,
environment, economic growth – are transnational in nature, require coordinated
responses, and make regional cooperation essential.
India’s
experience of bilateral development partnerships in South Asia, with countries
as diverse as Afghanistan, Bhutan, Myanmar and Nepal is sufficiently indicative
of our capacity to undertake regional cooperation. In any such endeavour, the
immediate or shorter term commercial, foreign policy and strategic interests
must be balanced with our longer term objective of becoming a regional and
global actor of relevance and significance in a fast changing world.
It follows that
an attitude of neglect or immobility to our immediate neighbourhood will not
enhance our capacity and may deny us options. Global observers have also noted
our policy approach of developing cooperation with other regional organisations
in and around Asia and have contrasted it with our studied neglect of SAARC.
Some years back
former Prime Minister I.K. Gujral had posed a question: how to reposition South
Asia as a community in the changing Asian and global context? He had observed
that ‘no member of SAARC can afford to make national security and national
interest parameters narrow and ever shrinking’ adding that ‘we must enlarge the
scope of our functional relations, widen the scope of our operations, create
huge space for positive interaction and sustained benefits sharing.’
It is evident
that longer term policy options and initiatives have to be a judicious mix of
vision and realism. The vision for India is of a major emerging power working
for a more equitable, peaceful and cooperative world order in which all nations
would reap the fruits of development. Realism, on the other hand, necessitates
that we strike the right balance in the hierarchy of national interests. One
ingredient of this hierarchy is a peaceful neighbourhood. An effective way of
achieving it is through mutually beneficial cooperation with neighbours, an
endeavour in which India is best placed to set the pace. Immobility, however,
is not a desirable option.
I wish the
conference all success.
Jai Hind.”
*****
Sanjay Kumar/VPI/14.12.2013